KARACHI: Repatriation of profits and dividends on foreign investments surged by 39 per cent during the first four months of the current fiscal year (FY26), according to data released by the State Bank of Pakistan (SBP) on Wednesday. Outflows from July to October reached $1,137 million, up from $818 million in the same period last year, marking an increase of $319 million.
October alone accounted for 34 per cent of the total outflows, with $386 million repatriated. China and the UK were the largest recipients, receiving $167 million and $96 million respectively. Over the four months, China emerged as the top beneficiary with $372 million, a sharp rise from $84 million in FY25, while the UK received $258 million and the US $77 million.
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Sector-wise, the power sector recorded the highest outflows at $342 million, followed by finance and insurance at $229 million. The manufacturing sector received $217 million, while wholesale and retail accounted for $140 million. Analysts noted that easing restrictions on profit repatriation had primarily benefited China and a few other countries.
Despite the significant outflows, foreign direct investment (FDI) remained weak, declining 26 per cent during the same period. Experts attributed the slow inflows to persistent challenges in boosting investor confidence, despite a more open stance on repatriation compared to previous fiscal years.
SBP data indicated that the increased profit outflows did not adversely affect the country’s foreign exchange reserves or destabilise the exchange rate, even as concerns persist over sustaining foreign investor trust in Pakistan.